CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A003700070001-3
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 15
• Document Creation Date: December 12, 2016
• Document Release Date: May 31, 2002
• Sequence Number: 1
• Publication Date: May 8, 1958
• Content Type: REPORT

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8 May 1958
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II. ASIA-AFRICA
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flict.
Indonesia: North Celebes dissidents have destroyed
two government aircraft in a 7 May strike on Ambon air-
field. Communist agitation for a boycott against American
film interests in Indonesia appears to be the first step in
the implementation of Communist secretary general Aidit's
recent threat of reprisals if "American aid" to the dissi-
dents were not stopped. Premier Djuanda is writing per-
sonally to the heads of several Asian and African nations
to report on "foreign intervention" in the Indonesian con-
Libya: The Libyan cabinet has decided to call for rene-
The criterion for the size
of new Libyan demands will be the payments the United
States is making to other governments for military facili-
ties like those at Wheelus Field. Last week Libya success-
fully concluded negotiations for British aid during the next
five years.
Persian Gulf oil: The Ruler of Kuwait has awarded his
half interest in the promising Neutral Zone offshore oil
area to the same Japanese firm which late last year success-
fully bid for Saudi Arabia's half interest. The concession
agreement calls for a 57/43 -percent split on all phases of the
company's, operations, apparently including sales down to the
service station level. This agreement comes shortly after
8 May 58
DAILY BRIEF
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NEW OIL CONCESSION AREAS
STANDARD OIL CO.
(INDIAINA)
JAPANESE PETROLEUM
EXPORT CO.
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the 75/25-percent profit split and joint participation arrange-
ment embodied in the Standard Oil Company of Indiana con-
tract with Iran. It is another breach of the traditional 50/50
\'\ profit-splitting formula and will further encourage area coun-
tries to begin demanding renegotiation of their existing con-
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cession agreements.
Burma: The long-standing dispute between U Nu and
Kyaw Nyein will probably come to a head when a special ses-
sion of the Burmese Parliament meets on 5 June. The en-
suing debate between the two opposing factions within the
Anti-Fascist People's Freedom League, the government coali-
tion, will result in a test of strength which will probably com-
pel either U Nu and his independent'supporters, or Kyaw .
Nyein and his Socialist party members, to withdraw from the
coalition and operate separately. Unless the breach is closed
by a compromise settlement, which now seems unlikely, Burma
will be threatened by political instability since any new regime
8 May 58
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would be either a minority government or a coalition com-
manding only a small majority in Parliament.
(Page 8)
.III. THE WEST
canal.
Panama: The growing agitation for US recognition of
Panamanian sovereignty over the Canal Zone forced Presi-
dent de la Guardia to say on 5 May that he would undertake
immediately the necessary steps to have.the Panamanian
flag flown there. He did so in response to demands of stu-
dent demonstrators who had planted 75 Panamanian flags
in the zone in protest against a US request for permission
to survey possible radar sites in Panamanian territory.
The generally moderate De , la Guardia, who lacks strong
political support, will find it increasingly difficult to resist
the mounting pressures for US concessions regarding the
West German - UAR: The economic agreement signed
on 7 N a providing for over $80,000,000 in German credits
to the UAR reflects growing concern in Bonn over East Ger-
were previously discussed with the Soviet bloc.
many's increased economic activity in the Middle East. In
an effort to counter East German influence' and prevent
recognition of the Communist regime by Middle East coun-
tries, Bonn officials have for some time felt some decisive
move was necessary to restore Bonn's declining trade with
Egypt. West German negotiators received the impression
that the UAR wanted Bonn to work on certain projects which
8May58
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II. ASIA-AFRICA
Situation in Indonesia
The Indonesian dissident radio in North Celebes announced
another air strike against Ambon airfield on 7 May, which de-
stroyed two government aircraft and an. oil storage dump. . The
rebel broadcast stated that the dissidents' B-26 did not inter-
fere with a Garuda Indonesian Airways plane which was leav-
ing the air base but warned that in the future nonmilitary air-
craft will be shot down if they continue to use airfields which
are dissident targets.
In Djakarta Indonesian Prime Minister Djuanda announced
he is asking a number of Asian and African nations to give
their attention to the problem of foreign intervention in In-
donesia. This suggests that the government now is seriously
considering taking the matter to the United Nations.
The Communist-led film workers' trade union on 5 May
reportedly told its branches to stand by for a nationwide boy-
cott against American films "unless US intervention ceases
immediately." This action apparently is a follow-up of the
2 May letter by the Indonesian Communist party secretary
general to the American ambassador in Djakarta threatening
to encourage action against American interests in Indonesia
unless "aid to the rebels" stopped. Other Communist efforts
to exploit the issue of alleged American intervention include
the establishment on 4 May of an "anti-foreign intervention
movement" composed of both Communist and non-Communist
organizations and a request to the WFTU by SOBSI, Indonesia's
largest and Communist-led trade union federation, for a world
campaign condemning "American intervention."
8 May 58 CENTRAL INTELLIGENCE BULLETIN Page 4
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EQUATORIAL
AFRICA
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Selected railroads
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 Approved
Libya May Ask Renegotiation of US Base Agreement
The Libyan Government, having last week successfully
concluded a five-year agreement for British economic and
military aid, is reported to have decided to demand rene-
gotiation of the Libyan-American base agreement.
the cabinet wants to use the
amount of money being "paid" by the United States to other
countries for facilities similar to Wheelus Field and its
associated operations as a criterion for payments to Libya.
the Libyans wish to separate
clearly any negotiations on "payments" for the air facilities
from "ordinary" economic aid,, which they believe is of
little help to them politically, however beneficial it may
be economically.
The Libyan-American agreement of 1954 extends to
1971 and obligates the United States to pay Libya a total of
$40,000,000. It has been under heavy attack recently by
Cairo's propaganda and by pro-Egyptian elements in Libya.
These media have emphasized that Libya runs a serious
risk of involvement in hostilities and that even in peace-
time the Libyans are in danger from accident involving nu-
clear weapons. The Libyan Government is both pressed
by this propaganda and inclined to use it to extract conces-
sions
Under the British-Libyan agreement concluded in Lon-
don on 3 May, the British are to pay $9,100,000 a year for
the next five years, to train the Libyan army, to furnish it
with light equipment, and to "expedite discussions" con-
cerning aid for a Libyan navy. The annual payment to which
the British agreed is $2,800,000 higher than they had pre-
viously indicated was the maximum they would be willing to
pay. Total US aid to Libya from 1954 through 1957 was
about, 000, 000.
8 May 58 CENTRAL INTELLIGENCE BULLETIN
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New Burmese Government Expected in June
Burmese President Win Maung has called a special
session of Parliament for 5 June to debate a no-confidence
motion to be brought against Premier Nu. The motion will
be made by Deputy Premier Kyaw Nyein and will force a
showdown in the long-standing personal feud between him
and Nu for leadership of the government party, the Anti-
Fascist People's Freedom League (AFPFL),
Pending the parliamentary session, Burmese politics
are in a state of turmoil. Maneuvering and bargaining for
parliamentary votes appear to have displaced all other gov-
ernmental considerations. Some political sources predict
a Kyaw Nyein victory, while the Rangoon press appears to
expect U Nu to triumph. Other Burmese leaders, notably
Deputy Premier Ba Swe, continue to urge reconciliation be-
tween the two factions but apparently with little hope of
success.
The AFPFL, which has ruled Burma since the country
became independent in 1948, has weathered several serious
splits and desertions. The present controversy, however,
threatens to deprive Burma of its strongest asset for politi-
cal stability- -one -party government. Should U Nu lose the
no-confidence vote, the resulting government would prob-
ably have to be formed from a coalition of the victorious
AFPFL faction with minor opposition parties.
The resultant instability of government may seriously
hamper effective implementation of any government pro-
grams for economic development. The government's mili-
tary and psychological campaign against the insurgents
should not be immediately affected, as all of the feuding
leaders support present government policies.
8 May 58 CENTRAL INTELLIGENCE BULLETIN Page 8
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III. THE WEST
Panamanian Agitation for Sovereignty Over Canal Zone
President de la Guardia's assurance to demonstrating
Panamanian students on 5 May that he would immediately
take the necessary steps to have Panama's flag flown in
the Canal Zone followed a recent barrage of newspaper
and radio discussion of US-Panamanian relations. The
US Army Caribbean Command describes the publicity
given the recent planting of 75 Panamanian flags in the
zone by students as "unparalleled."
Demands that the US accord Panama a greater role
in canal operations have been increasingly frequent and
urgent since Egypt's nationalization of the Suez Canal Com-
pany in 1956. High officials have asserted that half of
canal revenues should go to Panama and that some new
arrangement recognizing their country's sovereignty in
the zone would soon be necessary. Powerful businessmen
and politicians, the leftist student federation, and other
groups have also blamed Panama's serious economic
plight on US policies and claim the US has not honored
its treaty obligations.
Until now President de la Guardia has maintained a
moderate attitude despite opposition charges that he is not
defending Panamanian rights. Lacking support within his
own tenuous political coalition, the strongly adverse reac-
tion to possible additional US defense sites in Panama prob-
ably forced him to acknowledge student demands. Neither
De la Guardia nor the strong national guard apparently
feels it is any longer politically expedient to ignore the
risingrnaationalist sentiment. US authorities in Panama
feel hat an concessions would only be followed by further
de -ands.
8 May 58 CENTRAL INTELLIGENCE BULLETIN Page 9
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 Approved
Bonn Grants Large Credit to UAR
In an effort to counteract the growing economic activity
of East Germany in the Middle East, Bonn is granting over
$83,000,000 in credits to.the United Arab Republic. The
West German Foreign Ministry has been worried by the pos-
sibility that rapidly increasing trade between, East Germany
and Egypt would increase the. chances of diplomatic recog-
nition of East Germany by Middle East countries. Bonn of-
ficials have felt it was necessary to take some decisive step
to restore declining West German trade with Egypt. During
the first ten m~)nths of 1957, West German - Egyptian trade
fell slightly to $58,700,000--mainly because of reduced Ger-
man imports--while East German trade with Egypt doubled
to reach $30,700,000.
The Bonn Foreign Ministry has also been concerned over
the possibility that Nasir's current Moscow visit might re-
sult in recognition of East Germany. Just prior to Nasir's
departure the German ambassador stressed Bonn's policy
of breaking relations with any state recognizing East Ger-
many, and Nasir replied that he had no intention of extend-
ing recognition.
The eight-day talks in Bonn which preceded the signing
of the agreement on 7 May covered several development
projects, such as electric power development at Aswan, the
Latakia harbor works, and development of free port zones
at Port Said and Suez.
German negotiators received the impression that Syria
wanted Bonn to undertake certain projects which had pre-
viously been arranged with Soviet bloc countries. The agree-
ment, however, states merely that Bonn is ready to increase
investments and technical aid particularly in development
of port and harbor facilities.
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